ECONOMIES OF SCALE IN HIGH SCHOOL CONSTRUCTION AND OPERATION

The purpose of this study is to determine if economies of scale do exist in secondary education and, if they do in fact appear, to determine from what sources they arise. Specialized areas are found to contribute most heavily to overall economies of scale which in turn leads to certain policy alternatives. Instead of perceiving larger school facilities as a means of reducing per pupil cost, it is more accurate to realize that certain areas of the physical plant are the primary sources of such savings. Gymnasiums, auditoriums, and vocational education areas are responsible for a large percentage of the per pupil cost savings. Such specialized areas lend themselves to shared use by the community. If these areas were used more intensively by the community as a whole, the per pupil cost--including "pupils" involved in adult education in the evenings and Saturday recreation--would be reduced. Analysis was concentrated heavily on capital expenditures rather than current expense disbursements on a per pupil basis, although the latter received consideration where appropriate.

The analysis was carried out largely through application of economic engineering techniques to model high schools of varying capacities. Different areas of each model building were analyzed separately and for their contribution to total cost of the facility. Under such a framework, the relative contribution of each area to overall construction economies can be determined. In much the same manner, estimates were derived of costs directly associated with the structure such as maintenance and repair and utility charges. It was found that while all four of the model schools exhibited economies of scale, the economies arose from the specialized areas and were greatest in small schools. Per pupil costs were found to be greater the smaller the school plant because of lesser intensity of use. Because of minimum size requirements for gymnasiums, shops, and labs, more pupils will reduce the average cost of these areas. Based on the results of this study, large schools may be justified to support the specialized areas of instruction but not necessarily required for the more typical instructional areas or current expenses.

Because of excess capacity in specialized areas of small schools, economies of size are most apparent when increasing pupil capacity from 500 to 1,000. Once a school building is designed to house 1,500 pupils, economies of size are smaller for any larger facilities. Based on a purely cost savings criterion, there is little evidence for constructing schools any larger than 1,500 pupils.

Transportation costs were examined briefly for purposes of exposition. The relatively simple models employed tend to reinforce the notion that any economies of size associated with constructing larger school buildings will be at least partially offset by increased costs of transporting more students over greater distances to fewer schools. This is another negative factor to be weighed when considering consolidation of schools, especially in more rural areas.

Finally, the quality component of education was dealt with extensively, but indirectly. Previous studies were relied heavily upon in an attempt to determine if the quality of education is any way a function of the size of the student body and, therefore, the school building. Based on existing literature, it cannot be concluded that such a relation does exist.